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'Pound will rise if Gordon Brown goes' says Caxton FX poll

If the prime minister Gordon Brown should follow the example of several of his colleagues this week and step down from his post, the pound will gain strength against foreign currencies.

This is the prediction 47 per cent of clients responding to a poll carried out by Caxton FX, a currency exchange firm, who expect the pound to rise if the UK's image is strengthened with the departure of the PM.

At the other end of the spectrum, 32 per cent said that they expect the pound to weaken should Brown relinquish his post, as the move would leave a void in British politics which would not be filled until a general election next year.

"Markets hate uncertainty and while this struggle for leadership continues at Westminster, the pound will be subject to sudden, unpredictable fluctuations as we saw on Thursday," explained Caxton FX senior analyst Alex Dunn.

Transport secretary Geoff Hoon, Hazel Blears and work and pensions secretary James Purnell have quit the Labour cabinet this week, putting increasing pressure in the prime minister to announce his own resignation.